Generally, as assessed values increase year to year, the mill rates in the second year will fall and in a perfect world, only a small tax increase occurs
each year.

School Tax Changes for Industrial Property

Properties with 05 classification will receive an estimated increase of 7-15%, dependent upon the municipality (see attached chart). Properties with mixed
class will vary proportionately. A rough guide for 2014 would be to take 2013 assessed values times the adjusted mill rate prior to other adjustments. The
higher the mill rate, the lesser the % of change. The adjusted mill rate is calculated by adding all mill rates for each taxing jurisdiction plus school
tax at the class 06 rate of 6.2.

Example:

Industrial property in Richmond with Mixed Use (Manufacturing (05) and Warehouse (06))

2013

2014

Assessment 05

$2,500,000

$2,500,000

Mill rate

14.6514

16.5314

Assessment 06

$1,500,000

$1,500,000

Mill rate

15.6439

15.6439

05 Tax

$ 36,629

$ 41,329

06 Tax

$ 23,466

$ 23,466

Total Tax

$ 60,095

$ 64,795

Land Averaging in Vancouver

If the land increased in 2013 and/or could potentially increase in 2014, there will likely be a tax increase for 2014. The assessed land value in Vancouver
is the average of the last three years. The building value is then added.

Land value

2013

2014

2011

$1,000,000

2012

$1,500,000

$1,500,000

2013

$2,000,000

$2,000,000

2014

$2,200,000

Average Assessed Land Value

$1,500,000

$1,900,000

Building value

$ 50,000

$ 50,000

Assessed value

$1,550,000

$1,950,000

Tax increase

26%

Increase/Decrease in Assessed Value

If your assessments change in the same proportion to the % change of total assessments in your particular class (residential, commercial), then, your taxes
will remain the same. However, a disproportionate change will result in taxes changing. For example, if the change in assessed value on your property was
16% upwards from last year and the total overall assessments of all commercial properties increased by 10%, your taxes should go up by approximately 6%.
This information is not available until January; however, BCA have stated generally that the following increases can be anticipated:

Retail:

0 – 5 %

Industrial Land:

General

0 – 10 %

Vancouver

0 – 20 %

Industrial Property

5 – 10 %

Office Property

5 – 10 %

This is of concern if there has been some basic change to the property, such as size, physical condition or rental rates, or if the property sold at a
price that is significantly

different from the previous year’s assessment. The new assessed values should be estimated and new taxes calculated accordingly.

Increase in Government/Municipalities Budgets

Total tax needs have generally increased by some 2-5%. A check of previous tax bills will give a guide to the amount of annual increase, provided the
assessed value changes were consistent with the market. In most municipalities, the mill rate has been falling, but taxes increasing. BC Transit mill rates
did not fall even though values rose.

Change in Tax Allocation

The % share of tax revenue for each class may vary. A decrease in that % for say, 06 commercial class, will result in a fall in mill rate for that class.
If a taxing authority changes its splits, then any adjustments previously suggested will vary.

Assessment Valuation

BCA value properties on a “mass” basis. Specific idiosyncrasies of each property may or may not be recognized. A review of the assessed values will
determine whether BCA has properly identified any negative factors in a property.

Corporate Profile

Austin Real Estate Consultants specializes in the review and appeal of property assessments, rental arbitrations and appraisals. Peter Austin formed the
company in 2003 after having been a partner at Burgess Austin Cawley for 25 years, which he had founded in 1978 with Mr. Burgess.

Mr. Austin has been involved in the appeal process for over 35 years, and was the Chair of the BC Chapter of the Canadian Property Tax Association for 5
years up to 2011 and the Past President of the National Association. Consequently, Mr. Austin has developed an in-depth knowledge of the system and the
associated legal cases that affect how properties are assessed, which number over 500. Mr. Austin has saved clients millions of dollars in taxes over the
years.

Please call if you have any questions or if you would like us to estimate your taxes for 2014.